Having Lossless in the name, obviously
means Apple Lossless is a Lossless codec, unlike a lossy codec (such as
mp3) where audio quality is lost forever in the name of smaller files,
lossless stores the original CD track without loss, like zip for audio. Apple
Lossless can compress CD quality audio file to roughly half its
original size.

Apple Lossless files are stored in the
MPEG 4 container and have a .m4a extension. The MPEG 4 container is also
used for Advanced Audio Compression (AAC), a lossy compression (currently all tracks purchased from
iTunes Music Store (iTMS) are
AAC).

Have a .m4a file but do not know if it contains Apple Lossless or
AAC? dBpoweramp Music Converter
is able to show the contents (Apple Lossless or AAC) of an m4a file, by
simply holding the mouse over.

Performance

Compression wise, ALAC is quite average amongst other
Lossless codecs, whilst decoding speed is one of its strongest assets.
ALAC files are not hindered by tagging limitations.

ID Tagging

Being stored in a m4a file, Apple
Lossless files are tagged using the Quicktime / Apple iTunes tagging
format, a relatively simple tagging format, supports Unicode characters
(UTF-8). Any ID tag name can be added, yet the maximum length of each tag
value is 255 characters. Multiple artists, etc are supported as
is embedded album art.

Technical Details

Thought to be based loosely on FLAC
(Free Lossless Audio Codec), both use Linear Prediction, Apple have not released any technical
documents on Apple lossless, 3rd-party manipulation of Apple Lossless
files are solely to the reverse engineering work of
David Hammerton
[craz.net].
Apple Lossless files can be decoded at relatively high speed, in
comparison to other lossless codec.

Apple lossless supports 16 bit and 24
bit audio, as well as multi channel audio, such as 5.1